India’s efforts to benefit from the US-China trade war have been underwhelming, as evidenced by a report from Oxford Economics indicating that countries like Vietnam and Taiwan have made marked improvements in their exports to the US. Despite increased electronic exports, India’s reliance on Chinese imports raises concerns about its manufacturing sector’s competitiveness.

The ongoing US-China trade war has presented a unique opportunity for several nations to bolster their manufacturing and export capabilities. However, as highlighted in a recent report by Oxford Economics, India has not been able to fully capitalize on this opportunity, especially when compared to countries like Vietnam, Taiwan, and South Korea. While India has made strides in increasing electronic exports to the United States, it has simultaneously seen a marked increase in imports from China, which raises concerns about the actual value added to its manufacturing sector. By 2023, China was responsible for approximately one-third of India’s imports in electronics, machinery, and pharmaceuticals, and for certain semiconductor components, up to 67% of imports originated from China. This raises questions about India’s potential in the manufacturing sector and its ability to compete globally.

The US-China trade war has altered the dynamics of international trade, encouraging countries like Vietnam to seize new market shares previously held by China. While India has expressed intentions to enhance its manufacturing capabilities, the reality is that the structural challenges within India’s manufacturing framework continue to hinder its progress. As per the report from Oxford Economics, the lack of diversification in India’s export sectors—predominantly reliant on traditional industries—has restricted its growth potential, allowing countries with more agile manufacturing systems to outpace India in terms of increases in US imports.

In summary, while the US-China trade conflict has the potential to reshape global trade patterns, India has struggled to leverage this situation to its advantage. The findings from Oxford Economics underscore the pressing challenges facing India’s manufacturing sector, including its dependence on Chinese imports and the need for strategic reforms to enhance its competitive standing against nations like Vietnam, Taiwan, and South Korea. Unless significant changes are made, India may continue to face difficulties in realizing the full benefits of the current trade landscape.

Original Source: www.scmp.com

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